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CAS BUDGET RESPONSE - Disappointment that the £20 Uplift has not been made permanent

Citizens Advice Scotland has expressed disappointment that the Chancellor today failed to make the £20-per-week uplift to Universal Credit permanent.  

Introduced in March 2020 as a measure to help people whose income was hit by the COVID-19 crisis, the £20-per-week UC increase has allowed many households to keep their heads above water whilst the economic impact of COVID-19 has continued.  

However, as a result of the benefits freeze between 2016 and 2019, UC has fallen in value over a tenth (11.5%) behind inflation. The uplift is the only year UC has risen at or above inflation rates since its introduction 8 years ago, in 2013.  

Responding to the Chancellor’s statement, Nina Ballantyne, CAS spokesperson said:  

We are disappointed that the Chancellor did not use today’s Budget to make the £20 a week increase to Universal Credit permanent.  

"Universal Credit wasn’t enough to live on before the pandemic, and if the uplift ends, whether now or in six months,  it will be worth less in real terms than it was when it was first introduced in 2013. If the uplift is removed in October, people on UC face a cash income drop of as much as a quarter.  

“Strengthening our social security safety net and in turn our overall economy – rather than weakening it through continued uncertainty – should be the priority of government. 

“The cost of extending the uplift is a drop in the ocean compared to the pressure that will be placed on other public services when it’s cut. 

"Delaying the final decision on the uplift has once again left people without financial security when they need it most.” 

Note to editors:  

The number of people claiming Universal Credit in Scotland has almost since the start of the pandemic (from 255,880 people in February to 476,219 in December). Despite welcome support aimed at supporting the unemployed back into work, the vital and underpinning role of our social security system cannot be underestimated, with the Bank of England predicting a period of suppressed employment forecasts across 2021. Cutting the increase to Universal Credit will be a personal financial crisis for many, as well as having a wider negative economic impact.  

When the £20 uplift is removed, the value of Universal Credit will drop by as much as a quarter (25%). This means its value will be over a tenth (11.5%) less in real terms than it was when UC was first introduced 8 years ago, in 2013.

When the uplift is removed, monthly standard UC allowance rates will drop: 

› By a quarter for single claimants under 25, from £342.72 to £257.33 

› By a fifth for single claimants over 25, from £409.89 to £324.84 

› By 17% for joint claimants under 25, from £488.59 to £403.93 

› By 14% for joint claimants over 25, from £594.04 to £509.91 

Since the pandemic began, Citizens Advice Scotland has analysed Universal Credit CAB cases from people in complex debt. Complex debt refers to the level of support someone needs, whether that is due to the size of their debts in comparison to their income, or the number of separate debts they have.  

The Charity found that removing the £20 a week increase will result in 58% of these CAB complex debt clients being unable to meet their living costs (in a negative budget). The £20 a week uplift has so far reduced the number of CAB complex debt clients unable to meet their living costs by more than a third (38%).

Analysis by the Scottish Government has shown that removing the increase will cut over £450m to people receiving UC in Scotland, pushing 60,000 Scots into relative poverty, including 20,000 children.

Making the £20 increase to Universal Credit permanent is supported by the Work & Pensions Committee, Treasury Committee, Lords Economic Affairs Committee, a former Conservative Work and Pensions Secretary, a number of backbench Conservative MPs, as well as opposition parties and faith leaders.